Companies Act Section 455 — Dormant company
CHAPTER XXIX MISCELLANEOUS
Commercial / Corporate
Summary
Sub-section (1) allows a company that is formed and registered for a future project, or to hold an asset or intellectual property, and that has no significant accounting transaction, to apply to the Registrar for the status of a dormant company. An inactive company can also make this application. The application must be made in the manner prescribed.
The Explanation defines two key terms. An inactive company is one that has not carried on any business or operation, or has not made any significant accounting transaction during the last two financial years, or has not filed financial statements and annual returns during the last two financial years. A significant accounting transaction means any transaction other than payment of fees to the Registrar, payments to fulfil the requirements of this Act or any other law, allotment of shares to fulfil the requirements of this Act, and payments for maintenance of its office and records.
Sub-section (2) states that the Registrar, after considering the application, shall allow the status of a dormant company to the applicant and issue a certificate in the prescribed form.
Sub-section (3) requires the Registrar to maintain a register of dormant companies in the prescribed form.
Sub-section (4) provides that if a company has not filed financial statements or annual returns for two consecutive financial years, the Registrar shall issue a notice to that company and enter its name in the register maintained for dormant companies.
Sub-section (5) says that a dormant company must have the prescribed minimum number of directors, file the prescribed documents, and pay the prescribed annual fee to the Registrar to retain its dormant status in the register. It may become an active company by making an application accompanied by the prescribed documents and fee.
Sub-section (6) states that the Registrar shall strike off the name of a dormant company from the register of dormant companies if it has failed to comply with the requirements of this section.
Official Text
(1) Where a company is formed and registered under this Act for a future project or to hold an asset or intellectual property and has no significant accounting transaction, such a company or an inactive company may make an application to the Registrar in such manner as may be prescribed for obtaining the status of a dormant company.
Explanation.—For the purposes of this section,—
(i) “inactive company” means a company which has not been carrying on any business or operation, or has not made any significant accounting transaction during the last two financial years, or has not filed financial statements and annual returns during the last two financial years;
(ii) “significant accounting transaction” means any transaction other than—
(a) payment of fees by a company to the Registrar;
(b) payments made by it to fulfil the requirements of this Act or any other law;
(c) allotment of shares to fulfil the requirements of this Act; and
(d) payments for maintenance of its office and records.
(2) The Registrar on consideration of the application shall allow the status of a dormant company to the applicant and issue a certificate in such form as may be prescribed to that effect.
(3) The Registrar shall maintain a register of dormant companies in such form as maybe prescribed.
(4) In case of a company which has not filed financial statements or annual returns for two financial years consecutively, the Registrar shall issue a notice to that company and enter the name of such company in the register maintained for dormant companies.
(5) A dormant company shall have such minimum number of directors, file such documents and pay such annual fee as may be prescribed to the Registrar to retain its dormant status in the register and may become an active company on an application made in this behalf accompanied by such documents and fee as may be prescribed.
(6) The Registrar shall strike off the name of a dormant company from the register of dormant companies, which has failed to comply with the requirements of this section.